House GOP set to curb college student loan costs

ALAN FRAMAssociated Press Published: April 27, 2012 8:06 AM

WASHINGTON (AP) -- Republican leaders are ready to try pushing legislation through the House holding down interest rates on federal loans to millions of college students.

Democrats say that's a goal the GOP has adopted only lately, but the top House Democrat is opposing the measure anyway in a fight that highlights how election-year politics is coloring Congress' work.

The House planned to vote Friday on the bill, which would keep interest rates at 3.4 percent for subsidized Stafford loans, instead of rising as scheduled to 6.8 percent on July 1. The GOP-written package would cover its $5.9 billion cost by plucking money from a preventive health fund established in President Barack Obama's 2010 health care overhaul law -- a cut many Democrats are reluctant to make.

Friday's vote comes with congressional Republicans and Democrats, as well as Obama and his near-certain GOP opponent this fall, Mitt Romney, competing at every turn over who has the best prescription to wring jobs out of the still-struggling economy. The student loan battle fits nicely into that theme, with 7.4 million low- and middle-income students and their parents reliant on Stafford loans and a college education symbolizing the ticket to economic success.

The vote also follows days of campaign-style road trips that Obama used to get in front of the issue and portray Republicans as foot-draggers on it. The week began with Romney saying he favored keeping loan rates low, remarks he hopes will prevent Obama from making the matter a campaign fight but may have helped prod congressional Republicans into action.

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On Thursday, House Speaker John Boehner, R-Ohio, tried putting the focus on Obama's travel this week to three college campuses, where the president used rousing rallies to talk up his student loan effort.

"Our country's facing some major economic and fiscal challenges, yet here's the president wasting time on a fake fight to try to gain his own re-election," Boehner told reporters. He called the college visits "political stunts and, frankly, they aren't worth it and worthy of his office." He said Obama should repay taxpayers for the use of Air Force One for the trip.

Democrats noted that Republicans previously had questioned the wisdom of keeping students' interest rates low. They also accused Republicans of reversing themselves, after voting earlier this month for a 2013 federal budget that let Stafford loan rates double as scheduled.

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For House Minority Leader Nancy Pelosi, D-Calif., the emphasis was the GOP's cuts in the preventive health program, whose initiatives she said include breast cancer screening and children's immunizations. She contrasted that with a Democratic bill extending the low student rates by cutting subsidies to oil and natural gas companies, which is opposed by the GOP.

Pelosi characterized the Republican view as, "'We prefer tax subsidies for big oil rather than the health of America's women.'"

Republicans noted that many Democrats had voted earlier this year to take money from the preventive health fund to help pay to keep doctors' Medicare reimbursements from dropping. Obama's own budget in February proposed cutting $4 billion from the same fund to pay for some of his priorities.

The higher interest rates, if triggered, would affect the 7.4 million undergraduates expected to borrow new Stafford loans beginning July 1. This year, 8 million students took out such loans, averaging $3,568, according to the Education Department.

Despite the partisan battle lines, it seemed possible that some members of both parties would defect from their leaders' positions.

Heritage Action for America, a conservative group, was lobbying Republicans to oppose the GOP bill and let interest rates rise, saying to do otherwise would burden taxpayers. Several conservative GOP lawmakers said Thursday they hadn't decided how to vote.

On the Democratic side, party leaders were pressuring their rank-and-file to oppose the Republican measure. Some Democrats were eager to vote to keep student loan rates low, though it meant accepting GOP health care cuts.

Rep. Gerald Connolly, D-Va., said some Democrats "may feel upon reflection that they've got to swallow hard but swallow" those health care reductions. He said he hadn't decided how to vote.

Senate Democrats had their own version of the bill. It would keep current rates in effect for another year, but its funding source was one Republicans said they would not tolerate. It would make it harder for people earning at least $250,000 annually who own some privately held corporations to escape paying Medicare and Social Security payroll taxes on parts of their income.